Even after several years of budget cutting, Las Vegas officials are still planning to spend more money than the city takes in, according to a proposal outlined Tuesday.
The city’s tentative budget proposal for 2014 includes nearly $482 million in spending despite projecting less than $472 million in revenue.
The gap, about $10.3 million, will be filled with cash from the city’s reserve fund, a situation city officials acknowledge cannot be sustained.
“You’re buying yourself time; it doesn’t really solve the problem,” City Manager Betsy Fretwell said of using reserves to cover shortfalls in the operating budget.
Fretwell said the city is crawling back from the recession, which dramatically reduced local government revenue in part by undercutting property values that reduced property tax revenue. She said revenue is still
20 percent lower than it was in 2008.
Even if property values rebounded quickly to pre-recession values, tax revenue would lag because state law caps the rate at which property taxes can increase.
“Some of the revenue has begun to recover to a degree … but we have definitely not recovered fully,” Fretwell told the council.
The presentation Tuesday was a chance for the council and public to get a peek at city officials’ fiscal expectations for the coming year, but the numbers are likely to change.
One of the biggest unanswered questions is how much money will go to the Metropolitan Police Department, a cost the city shares with Clark County.
The tentative budget calls for the city to pay about $120.4 million to the Police Department, which Sheriff Doug Gillespie hopes will have a budget of about $502 million.
But county officials have yet to decide how much they’re going to contribute for police, which might affect the city’s contribution.
Also, the state Legislature is considering a bill that would let the county impose an additional quarter-cent sales tax to fund police throughout Clark County. The city’s budget projections would need to be amended if the bill fails.
The one-quarter of a cent increase could raise as much as $75 million annually for police departments countywide to pay officers, including about $50 million for the Metropolitan Police Department, which is funded by Las Vegas and Clark County.
Gillespie has said his department’s revenue projections are about $456 million, about $46 million short of what he wants to spend.
“This has to pass,” Mayor Carolyn Goodman said of the sales tax bill. “You can’t have any community without safety assured to every one of us.”
But Councilman Bob Coffin, a former legislator, said he is not betting the tax will pass.
“I never thought the quarter-cent would pass this session,” said Coffin, who predicted it will mean more stretching by local officials to make their budgets balance. “We have to be like gymnasts in Cirque du Soleil with these budgets in the next two years.”
According to the presentation, general fund revenue of $471.5 million will come mostly from the consolidated tax, which is mainly sales tax. It’s expected to be about $238.5 million.
The second-largest revenue source is property tax, which is forecast to be $88 million, followed by license and franchise fees at $76.8 million.
The biggest expenditure category is wages and benefits, which is projected to be $260.6 million, up from an estimated $247 million this year.
The second-largest expenditure is the projected $120.4 million for Las Vegas police. The use of $10.3 million from reserves to close the gap between spending and revenue would reduce the reserve fund from $101.5 million to
$91.2 million, according to the presentation. The spending projections include about $10 million in debt service on the new City Hall, which opened in 2012.
The proposed general fund budget also includes 24 new or restored positions. Among those, 17 are in the category of public safety. Another three positions would be used to reopen the Derfelt Senior Center, two for technical support in the council chambers and one each for a background check specialist and legislative manager, who would be charged with tracking legislation that could affect the city.
Tuesday’s meeting covered the general fund, which is just a portion of the nearly $1.2 billion in budgets in city government. Other major funds include
$233 million for capital projects, $197 million for internal service funds, $108 million in enterprise funds and $106 million in special revenue funds.
The tentative budget is scheduled to be filed with the state on Monday. There will be a public hearing on May 21, and the final budget will be filed in June.
Contact reporter Benjamin Spillman at firstname.lastname@example.org or 702-383-0285 .